January 5, 2009

At the National Alliance for Medicaid in Education, Inc. (NAME) 2008 Annual Conference, the Centers for Medicare and Medicaid Services (CMS) conducted a panel presentation regarding Medicaid services provided in schools. Conference participants submitted both written and oral questions to the CMS panel. Due to time constraints, CMS was unable to answer all of those questions. NAME recently received written answers from CMS and they are posted on the NAME site.

You can obtain further information about NAME and the benefits of membership by clicking here.

A Hearing of the House Oversight Committee on

The Administration’s Regulatory Actions on Medicaid:

The Effects on Patients, Doctors, Hospitals, and States

(Directed at the recent CMS regulations affecting reimbursement for school-based health programs)

Chairman Waxman's Opening Statement, House Oversight Committee Hearing, 11/1/07

 Throughout this year, our Committee has held a series of hearings on making government work again. We’ve focused on programs or agencies that once were effective but are now broken or dysfunctional.

Today’s hearing examines one of our government’s most important agencies — the Centers for Medicare and Medicaid Services at the Department of Health and Human Services. Called “CMS” for short, the agency is responsible for administering the country’s two largest health insurance programs, Medicare and Medicaid, which cover nearly 100 million Americans at a cost of over $600 billion. As the largest single purchaser of healthcare in the country, CMS has enormous power to do good or to do harm.

 Over the past few months, public and congressional attention has largely been focused on the State Children’s Health Insurance Program, or S-CHIP. Legislation to strengthen S-CHIP and to expand it to cover 10 million children has cleared the House of Representatives on three separate occasions. Members of the House and Senate have already debated S-CHIP numerous times, and that debate is not yet over.

 Medicaid is funded jointly by the federal government and the states. It covers more than 60 million low-income Americans. Medicaid is the largest insurer of infants and children in the United States, covering more than 28 million kids. It is also the largest insurer of people with disabilities, covering almost 10 million people. Medicaid is the single largest source of funding for our nation’s public teaching hospitals, children’s hospitals, community health centers, and public clinics — programs that benefit not only the poor, but everyone in their communities.

Unfortunately, little notice has been paid to a series of Medicaid regulations proposed by the Administration over the last ten months. But these proposals would have enormous impacts. They are a thinly disguised assault on the healthcare safety net. If implemented, they would cause major disruption to state Medicaid programs and the people and institutions that depend on them.

In total, the proposals would shift at least $11 billion in costs to state and local governments — the largest Medicaid regulatory cost shift in memory. Since these are federal matching funds, the real cuts in programs at the local level would be at least twice this amount. This would force states to make a difficult choice: either raise taxes or cut vital services. This scenario probably understates the potential for damage, as there are almost certainly more proposals to come.

 This morning, our Committee will examine six rules the Bush Administration has proposed. These rules seek to:

o                 Restrict coverage of rehabilitation services for Medicaid-eligible people with disabilities;

o                 Eliminate the ability of schools to provide administrative services, such as enrollment, eligibility counseling, and referrals, for Medicaid children;

o                 Eliminate Medicaid funding for transportation of severely disabled children to schools where they receive Medicaid services;

o                 Restrict what states may cover as hospital outpatient services under their Medicaid programs;

o                 Eliminate Medicaid support for graduate medical education at our nation’s teaching hospitals; and

o                 Restrict the manner in which states may raise funds to support the state share of Medicaid, and sharply limit supplemental Medicaid payments to public hospitals and other “safety net” providers.

Three of these proposed rules target some of our nation’s most vulnerable citizens by cutting funding and services to disabled children, disabled adults, and elementary school kids.

 The other three would cut billions of dollars in federal funding from some of our nation’s most vital healthcare institutions — teaching hospitals that are training America’s future healthcare workforce, safety net providers that not only care for Medicaid patients, but millions of uninsured Americans, and public hospitals that support trauma centers, burn units, and other vital but unprofitable programs that benefit everyone in the community — insured and uninsured alike.

 Indeed, many of the institutions that will be hardest hit by these CMS rules serve as the cornerstones of their community’s disaster response capability, and are therefore essential for homeland security.

 What is almost as troubling as the impact of these rules is the manner in which they are being pursued. One of the proposed rules, the one that affects how states may raise funds for Medicaid and use this money to provide extra support for public hospitals, is a case in point.

Over the past few years, the Bush Administration has repeatedly sought to restrict states’ flexibility to finance the state share of Medicaid. But when bipartisan majorities of the last Congress rejected these efforts, the President sought to bypass the Congress through rulemaking. In response, 300 members of the House and 55 members of the Senate signed letters to Secretary Leavitt opposing the effort. Following the mid-term elections, the Administration renewed its effort in January, once again proposing to change the way Medicaid pays for public hospital costs. Again, bipartisan majorities of the House and Senate wrote to Secretary Leavitt to express “grave concern” or outright opposition to the Administration’s proposal.

 Undeterred, CMS pressed ahead.

 During the 90-day comment period on the proposed rule, CMS received more than 400 negative comments. The bipartisan National Governor’s Association, the bipartisan National Council of State Legislatures, the bipartisan National Association of Counties, numerous state and county governments, and a large number of hospital organizations, professional associations, and consumer groups all raised concerns. Not one person wrote in support of the rule.

In response, Congress imposed a one-year moratorium on CMS’s authority to implement the rule. Despite all this, CMS still moved ahead.

 The very same day that President Bush signed into law the appropriations bill that contained the moratorium, CMS published its final rule, apparently to make sure that the new policy goes into effect immediately upon the expiration of the moratorium.

This is just one example. All of the proposed regulations are made up out of whole cloth by CMS. The most recent change in the underlying statutes that CMS is seeking to “redefine” was passed in 1991 during the first Bush Administration. One statutory provision they are “reinterpreting” hasn’t been changed in forty years. This is clearly lawless regulation, not anchored in statute. It does not have the support of the Congress and it deserves no deference from the courts.

 Of course, CMS had other options. It could have gone back to the drawing board to put together regulations that do not threaten the emergency care capacity of many of our nation’s largest cities — cities that are the most likely sites for healthcare disaster needs, such as hurricanes, earthquakes, pandemic flu, and even bioterrorism. It could have developed regulations that do not suddenly shift billions in costs to the states and localities.

 Instead, it launched an assault on Medicaid.

 These actions, and the subsequent issuance of five more proposals that shift an additional $7 billion in costs to the states, bring us to today’s hearing.

 The first panel will describe the effects of these rules on individual Americans, their community providers, and the states.

Dennis Smith, the official at CMS who wrote these regulations, will join us on the second panel.

 If past comments are any indication, Mr. Smith will likely assert that CMS is pursuing these rules to preserve the “fiscal integrity” of Medicaid. As I understand this argument, CMS has to destroy Medicaid in order to save it. Let’s be clear: there is no committee in Congress more interested in the fiscal integrity of federal programs than this one.

But let’s also be clear: these regulations are not about program integrity. If they were, CMS would be refining guidance and improving accountability. Instead they seek to prohibit services that have been successful for decades and cut funding that the Congress has specifically preserved. This is not careful surgery on Medicaid; this is reckless amputation.

I very much hope that CMS will listen carefully to what our witnesses and the members of this Committee have to say about its proposals, and then go back to the drawing board. If there truly are fiscal integrity concerns that need to be addressed through new rules, this Committee will consider them. But we will not support an unauthorized regulatory offensive against the states, community providers, and Medicaid beneficiaries.  

The written statement of Dennis Smith of CMS can be found here.

  The written transcript of the Waxman hearing is available here.

Video of the entire hearing

(Audio only plays when individuals are speaking into a microphone)

Some Links of Interest

CMS-2258 (In effect in May of 2008)

CMS-2261 (Comment period closed)

CMS-2287 (Comment period closed)

Representative John Dingell Introduces the House Version of the Protecting Children's Health in Schools Act of 2007

February 16, 2007

H.R. 1017

Full Text of the Bill Available Here

On February 13, 2007, the Honorable John Dingell (D-MI), Chairman of the House Energy and Commerce Committee, introduced H.R.1017 to amend title XIX of the Social Security Act to improve requirements under the Medicaid Program for items and services furnished in or through an educational program or setting to children, including children with developmental, physical, or mental health needs, and for other purposes.

Cosponsors of the bill are:

Senator Edward Kennedy Introduces the Senate Version of the Protecting Children's Health in Schools Act of 2007

February 14, 2007

 S. 578

 (Kennedy,Mass.), introduced the "Protecting Children's Health in Schools Act of 2007", to amend Title XIX of the Social Security Act to improve requirements under the Medicaid program for items and services furnished in or through an educational program or setting to children, including children with developmental, physical, or mental health needs (Finance); statement at S1922.  Details to follow. 

Summary of the bill in Word format can be found here.  Summary in PDF format can be found here.  List of cosponsors and Senator Kennedy's introductory statement can be found here.